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Goodbye Texas Eastern District

In the TC Heartland v. Kraft Food case, the Supreme Court ruled that the Eastern District Court of Texas is no longer patent litigation central. Goodbye forum shopping.

In a strange quirk of patent law, a single judge from Marshall Texas (population 24,000) has been deciding more than 25% of the US patent infringement cases. If you wanted to sue someone for patent infringement and wanted a friendly court, the Eastern District Court of Texas was the place for you.

Put it this way: so much patent litigation happened here that Samsung actually sponsored a local Marshall Texas ice skating rink, just to keep the locals happy.

This is very unusual. Corporations are typically sued in their state of incorporation or in the primary state where they do business. However, patent litigation has had its own set of rules. For nearly a generation, lower courts have interpreted these rules as implying that corporations can be for sued for patent violations nearly anywhere in the US.

It didn’t take long for patent litigation experts to figure out that if this was the rule, then why not sue where the courts are friendliest? This practice is also called “forum shopping”.

The local economy around Marshall Texas had been struggling. What to do? In what may have been a bit of a “race to the bottom”, the Federal Court and local juries in Marshall Texas became increasingly patent-plaintiff-friendly. Lots of attorneys with big corporate expense accounts started flying to Marshall. Good for the local economy, but it starts to look a bit fishy…

In the recent TC Heartland v. Kraft Food decision, the Supreme Court decided that this had to stop. They ruled that if Congress had intended this sort of thing, Congress would have said so plainly. They also pointed out that there wasn’t much of a basis for the “file anywhere” interpretation. So goodbye “file anywhere” rule. And for the most part, goodbye Eastern District Court of Texas.

Going forward, the new hot spots for patent litigation may become Delaware (many corporations are incorporated there), California (high tech industry), and other high-tech areas.